A report by JP Morgan has been released which argues that the current decline in the price of bitcoin could continue until the end of March.
The lengthy report (28 pages) analyzes many metrics and data, as well as bitcoin’s history over the past few years, and concludes that a price of around $35,000 should currently be considered the upper limit of the fair value range.
This conclusion therefore leads analysts to believe that unless BTC’s price volatility eases rapidly, the goal of reaching $50,000 or even $100,000 by year-end is not sustainable.
However, it must be said that this report is three days old, and indeed volatility has decreased in recent days.
According to the same analysis, the lower limit would be $11,000, so for JP Morgan analysts the current fair value of BTC would be between $11,000 and $35,000, the average being $23,000.
What influences the price of Bitcoin according to JP Morgan
However, the report clearly shows that, compared to 2017, the current price rally is mainly due to institutional capital inflows into this market, but assumes that not all of these constitute long-term investments, and instead there is a good speculative component.
In addition, there was also a strong retail component, particularly from services such as PayPal, but this had diminished in the last two weeks.
In order to start a new bullish impulse, they argue that the price would have to return to above $40,000 soon, otherwise the descent could continue until the end of March, however, at this stage the conditions for a return to above $40,000 do not seem to be in place.
Nonetheless, the report reiterates the long-term theoretical price target of $146,000 that was suggested a few weeks ago.
The report also argues that bitcoin should still be considered as a risky asset, rather than a safe asset, although it does share with gold an increased correlation with the S&P 500 from March 2020 onwards.